Soft drinks industry rejects calls for budget sugar tax

Taxing question: a duty on sugary drinks at the rate of 20p per litre would raise about £1bn a year, said Sustain

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Food and drink manufacturers have rejected calls from the campaign group Sustain for the chancellor to introduce a duty on sugary drinks at the next Budget.

More than 60 organisatons ‒ including the Association for the Study of Obesity, the Association of Teachers and Lecturers and the Centre for Food Policy, City University – are backing the request.

Sustain’s report ‒ A Children’s Future Fund – how food duties could provide the money to protect children’s health and the world they grow up in ‒ published today (January 29) calls for the money raised by the duty to be spent on improving children’s health by, for example, providing free school meals.

Other suggestions include: appointing an independent body the responsibility to oversee how the sugary drinks duty is implemented, reforming the VAT system to reflect the healthiness of food and drinks and to introduce duties on unsustainable foods.

‘Complex problem of obesity’

But Gavin Partington, British Soft Drinks Association director general, warned a tax on soft drinks ‒ which contributes just 2% of the total calories in the average diet ‒ would not help to remedy the “serious and complex problem”, of obesity,

During the past 10 years, the consumption of soft drinks containing added sugar fell by 9%, while the incidence of obesity has risen by 15%, he said. “We all recognise our industry has a role to play in the fight against obesity, which is why soft drinks companies have already taken action to ensure they are playing their part.”

Partington claimed 61% of soft drinks now contain no added sugar. Also, soft drinks companies had pledged further voluntary action as part of the government’s Public Health Responsibility Deal Calorie Reduction Pledge, he added. The commitments included: reducing the sugar content in products and introducing smaller packs.

The poorest families

Terry Jones, Food and Drink Federation director of communications, said soft drinks are taxed at the standard VAT rate of 20%. Additional taxation of food would hit the poorest families hardest at a time when they can least afford it, he claimed.

“Recognising the growing obesity problem, food and drink manufacturers are committed to doing what they can to improve public health,” said Jones. “By changing product recipes, creating new healthier options, investing in consumer education and providing clear nutritional information to enable healthier choices, manufacturers are playing their part to deliver better long-term public health outcomes.”

But Charlie Powell, Sustain’s campaign’s director, railed against “sugar-laden drinks” describing them as “mini-health timebombs”. Such drinks contributed to dental diseases, obesity and a range of life-threatening illnesses which cost the National Health Service billions each year, he claimed.

A duty on sugary drinks at the rate of 20p per litre would raise about £1bn a year, according to the campaign group.

Mike Rayner of the Department of Public Health at Oxford University and chair of Sustain, added: “Just as we use fiscal measures to discourage drinking and smoking and help prevent people from dying early, there is now lots of evidence that the same approach would work for food.

“This modest proposal goes some way towards making the price of food reflect its true costs to society. Our obesity epidemic causes debilitating illness, life threatening diseases and misery for millions of people. It is high time government did something effective about this problem.”